During the approximately 50% retracement of the crypto market, none of the interviewed holding institutions reduced their allocation to crypto assets, and Bitcoin was their only common holding.
Author: Bitwise
Compiled by: Jia Huan, Chain Catcher
Unlike most assets, cryptoassets were initially driven by retail investors. Even today, retail investors are estimated to control more than two-thirds of the crypto market. ¹ This means that institutional investors will still play an important role in the development of this asset class. Therefore, the extent to which institutional investors embrace cryptoassets will have a significant impact on the prospects of this asset class.
However, institutions are often reluctant to speak publicly about their views on cryptoassets. Whether for competitive reasons or fear of reputational damage, most institutions have historically avoided publicly disclosing their holdings.
This report hopes to break that silence.
Earlier this year, we spoke with senior investment professionals from 15 of the world’s largest institutions to understand their views on crypto assets. We asked some straightforward questions: What crypto assets do you buy? How many are configured? Why hold crypto assets?
We were surprised by their candid answers. Among the findings: Despite crypto asset prices retracing more than 50% between October 2025 and April 2026, none of the institutions we spoke to plan to reduce their allocations to the asset class. Institutions are making long-term allocations.
Whether you're interested in understanding how your peers view other institutions in the space, or you're a retail investor looking to gauge market sentiment, this report will open a window into how some of the world's most influential investors view the crypto market today.
Institutional money is entering the crypto space
Institutional investors are starting to consider crypto assets as an important part of their investment portfolios. Cryptoassets are becoming institutionalized faster and more sustainably than the public generally believes. Although there is still a lot of uncertainty in the market, we expect that the majority of institutional investors will hold crypto assets over the next five years.
After conducting interviews with 15 senior asset allocation decision-makers from endowments, foundations, pensions, multi-family offices, sovereign wealth funds and public companies, we found three consistent trends.
Bitcoin is a high-conviction asset generally recognized by institutions, while Ethereum and Solana are not. All the institutions we spoke to that hold crypto assets hold Bitcoin. Most institutions view Bitcoin as a store of value, often explicitly comparing it to gold. Ethereum, Solana and other crypto-assets are viewed by some institutions as early-stage technology investments, with institutions setting clear performance thresholds and adopting shorter holding periods. The crypto asset allocations of surveyed institutions ranged from 0.5% to 13% of investable assets, with the majority ranging from 1% to 2%.
Institutional crypto asset allocation has strong sustainability. From October 2025 to April 2026, the crypto market fell by approximately 50%, but none of the institutions we interviewed reduced allocations during the market decline, and several increased their holdings. When asked what circumstances would prompt them to quit, no one mentioned price. The reasons they are considering exiting have to do with investment logic: Ethereum and Solana fail to demonstrate practical use, regulatory direction reverses, or the entire industry suffers a credibility crisis. This goes against a common assumption: institutions are not the most vulnerable to selling when crypto markets fall, and selling pressure comes from elsewhere.
The remaining barriers to growth are governance and reputation, not investment value. Most institutions we speak to recognize the value of including crypto assets in a diversified portfolio. What currently slows down the allocation progress is how to incorporate crypto assets into existing investment policy classifications, how to pass board and committee approvals, and how to manage the reputational risks brought by external attention. As spot crypto ETFs proliferate, the regulatory environment improves, and peers increasingly disclose their holdings, these barriers are weakening, but they still cannot be ignored.
We believe institutional demand is building up out of the public eye. Some investors interviewed who have not yet allocated crypto assets have entered the advanced stages of due diligence. However, we expect this process to unfold gradually. For assets that remain controversial, it can take years for institutions to reach consensus; even when allocations are made, institutions tend to keep a low profile. But there are signs that institutional funds are entering the crypto space.
01/Bitcoin is a high-confidence asset generally recognized by institutions
All the institutions we spoke to that hold crypto assets hold Bitcoin. For almost all institutions, Bitcoin is the first crypto asset they buy, hold the largest position, and hold for the longest time. It is the only crypto asset for which there is widespread consensus among institutional investors.
Institutions have different reasons for investing in Bitcoin. Most institutions view Bitcoin as a store of value with large potential upside, often alongside gold as a hedge against the decline in the purchasing power of fiat currencies. One endowment describes its Bitcoin position as an investment in an “emerging to mature store of value” and a venture-capital-like bet that the market will grow to $20 trillion over the next five to 15 years.
Several institutions allocate a basket of mainstream crypto assets based on market capitalization weights, so Bitcoin accounts for about 80% of their crypto asset holdings. However, most institutions hold Bitcoin as an independent position.
Even institutions that cannot hold Bitcoin directly recognize its role in diversifying risk in investment portfolios. A major endowment’s policy prohibits it from holding any physical commodities, including Bitcoin, but it still views Bitcoin as the digital counterpart to gold and the core asset of the entire crypto asset class.
02 / Ethereum and Solana are bets that depend on investment logic
Bitcoin has become the consensus among institutional investors, but that is not the case for Ethereum, Solana, and other smaller crypto-assets. Institutions holding these assets have smaller allocations, shorter investment periods, and have set clear exit conditions.
There are several institutions that hold no Ethereum or Solana at all, for varying reasons. One institution had heavily used DeFi applications involving lending, trading, stablecoins, and staking without seeing how the underlying tokens gained value. In their view, users do not care about the differences between blockchains, nor do they care whether the application runs on Ethereum or Solana. Another institution struggles to fit Ethereum or Solana into an existing investment framework: are they a store of value, an equity-like asset, or a commodity? If there is no clear logic of value accumulation or it does not fit into the existing investment framework, the default option is not to invest.
Institutions holding Ethereum and Solana view them as early-stage technology investments. Several institutions have made it clear that they will sell if there is no material adoption growth in the coming years.
For institutions that hold both assets at the same time, their preferences begin to diverge. An endowment is more optimistic about Solana's architecture, believing that it has high throughput, low latency, and does not rely on Rollup. Another holds Ethereum over Solana, focusing on Ethereum’s actual adoption and its dominant market share in real-world applications for cryptoassets, including DeFi, prediction markets, tokenization, and stablecoins.
It’s worth noting that in almost all cases, institutions view these assets as being driven by practical use; their value comes from practical application in the real world. Some in the crypto industry have tried to position Ethereum, and Ethereum in particular, as a competitor to Bitcoin for monetary purposes, but the institutional community does not share this view. In their view, these assets have investment value only if value can be clearly accumulated into the underlying tokens of Ethereum and Solana as transaction activity and fees increase.
03 / The configuration scale is not large, but the overall direction is to increase
Crypto asset allocations range from 0.5% to 13% of investable assets, with most ranging between 1% and 2%, and are typically allocated across channels such as ETFs, direct holdings, venture capital, and hedge funds. A common approach is to allocate an allocation large enough to have an impact on the portfolio when the crypto investment logic materializes, but not large enough to drag down the entire portfolio.
During the market volatility from late 2025 to early 2026, institutions maintained their existing allocations or continued to advance toward established goals. Many institutions are shifting funds away from illiquid private investment vehicles and toward direct holdings or exposure through ETFs. Several institutions have also added market-neutral strategies to reduce volatility from crypto-assets and make allocations more easily approved. One asset allocation decision-maker believes that this is a way to stop institutions from waiting on the sidelines: "The easier way to sell is to start with a market-neutral strategy. You are not really betting on cryptocurrency, you are just betting on arbitrage."
The focus of internal discussions within these institutions is no longer whether to allocate crypto assets, but how much to allocate, through which tools, and which assets to allocate.
04 / Spot ETFs change the way institutions enter the crypto market
Spot crypto ETFs change the way institutions enter this asset class. Nearly all the institutions we spoke to already use, or plan to use, such ETFs.
Institutions switching from direct custody to ETFs cite lower overall costs, lighter operational burdens, and the simple fact that from a back-end operations perspective, ETFs make crypto assets look like other ordinary holdings. For early allocators who have spent years dealing with custody, trade execution and position reporting for crypto assets, ETFs bring this to the table more than many might imagine.
Institutions that have not yet switched to ETFs are mostly limited to private equity investment vehicles and cannot freely choose their exit time. These institutions are actively evaluating ETFs, considering the same operational advantages but also the rebalancing flexibility and liquidity that closed-end products cannot offer.
However, there are a few institutions that intentionally do not use ETFs. A sovereign wealth fund is building local custody infrastructure to meet government demands for direct control over underlying crypto assets. A large public endowment’s policy prohibits it from holding any physical commodities, including through ETFs. Another institution mentioned that ETF holdings may need to be disclosed through 13F filings, which would bring public exposure they hope to avoid.
This will also affect the estimation of the size of institutional positions. Because some institutions intentionally invest in vehicles that avoid 13F disclosures, institutional crypto asset holdings estimated based on 13F filings should be considered a minimum estimate, not a ceiling.
05 / The combination of gold and Bitcoin has become an important allocation framework for institutions
For most institutions we spoke to, Bitcoin and gold are now often considered together. Especially for institutions concerned about the decline in the purchasing power of fiat currencies, Bitcoin is an important part of the mix. A large endowment said: "People are starting to put Bitcoin and gold together as an investment to hedge against the depreciation of fiat currencies."
Several endowments are interested in taking simultaneous positions in Bitcoin and gold as an option in portfolio construction. In one notable case, a sovereign wealth fund funded part of its crypto asset allocation by selling foreign exchange and gold reserves.
To some institutions, Bitcoin and gold increasingly look like two expressions of the same investment view, rather than just complementary assets. One institution places Bitcoin in the “gold category” and is blunt about its long-term view: “When we talk about this again in ten years, we may tell you that we have given up on gold and now it is all in Bitcoin.”
However, not all institutions share this view. One foundation rejects the idea of “digital gold” entirely, classifying all crypto assets as disruptive technologies rather than stores of value.
06 / Allocation barriers come from operations and reputation, not investment analysis
Among the institutions we interviewed, determining whether a crypto-asset is attractive as an investment is often the easiest hurdle to resolve. The past performance and development trajectory of cryptoassets are fairly clear, and the view of cryptoassets as a disruptive technology is widely accepted. It is thought to transform areas ranging from capital markets to global payments to store-of-value markets.
What is really slowing down allocations are operational, reputational and classification issues: how assets are managed, how investment logic is publicly explained, and how cryptoassets are incorporated into portfolios based on stocks, bonds and alternatives. However, these barriers are gradually weakening over time, as they are for all emerging asset classes.
The most practical advice we heard came from a multi-family office: “Just set up a process.” In other words, apply the same valuation framework to crypto assets as to other assets. Don’t set higher investment thresholds for crypto assets alone, even if they consider such assets to be “alarmingly volatile.”
Decision-making frameworks vary widely across agencies. At one end are institutions that have no formal approval process. The investment team decides on allocation and executes it directly. On the other end of the spectrum, a sovereign wealth fund’s crypto project was directly scrutinized by senior officials from the country’s central bank. The review included a background check of the chief investment officer, security review, public opinion risk and peer recognition. These factors receive more attention than the fundamental basis for the investment itself.
Another difficulty is how to classify crypto assets. Several institutions struggled to categorize Ethereum and Solana, and several decided not to invest simply because of this ambiguity. Two endowments have addressed the issue in different ways: One added a “liquid venture” category to its venture portfolio; the other sidestepped the debate and classified all crypto assets as venture capital.
07 / Occupational risks are an important factor affecting organizational behavior
Career risk, the career cost that an allocation failure can have on an investment professional, affects every public-facing institution we interviewed. It is often one of the most important factors in deciding whether and how to configure. Foundations, public pensions and sovereign wealth funds all factor in this. Institutions that are smaller, less exposed, or founder-led feel less pressure, but the pressure is still there.
Notably, we find that institutional configurations tend to occur in clusters. Once a certain number of peers have completed and disclosed allocations, the risk shifts from "I allocated it and something went wrong" to "Everyone else allocated it and I missed it." Our interviews suggest the endowment world may be approaching that tipping point. Several large university endowments have publicly disclosed their crypto holdings, and several told us they are now asking their peers about their crypto allocations more directly than in the past. One even made it clear that comparison with peers was one of its main drivers for allocating crypto assets.
However, this also brings a risk: if the market is depressed for a long time, the wind direction may reverse again, and the reputational risk caused by allocating crypto assets may exceed the risk caused by not allocating.
08 / Crypto fund management institutions for institutions are highly concentrated
There are not many crypto fund managers that meet institutional investment requirements. One sovereign wealth fund said: “It was difficult to find managers that met our minimum requirements for size, proven track record and operating infrastructure. We found about ten names.” When it exchanged information with other institutions, the list changed little: “Different institutions have different due diligence progress, but everyone is looking at the same managers.” Other institutions we interviewed confirmed this.
This convergence is reassuring to a certain extent, indicating that institutional investors have come to similar conclusions about which managers meet the standards after rigorous scrutiny. But it also creates a concentration of risk. As more institutions complete their due diligence and begin investing, a sizable portion of the money will flow to a handful of companies. If any one of them experiences compliance lapses or operational failures, the entire community could be affected. Some investors are worried about the consequences. “There is a risk that funds will raise too much and be forced to invest without enough good opportunities in the market,” one endowment said.
This concentration can also have reverse effects. Governing bodies are eager to access capital from sovereign wealth funds and endowments, so large investors have significant bargaining power. Some institutions are using this to seek ways to collaborate beyond ordinary fund investments. A sovereign wealth fund is considering taking a direct stake in a management company to "obtain full transparency, understanding of its investment strategy and better understand the market".
09 / Exit conditions depend on investment logic, not price
From October 2025 to April 2026, the crypto market fell by approximately 50%. None of the institutions we interviewed reduced their allocation to crypto assets during this period, and several increased their holdings. Asked what would prompt them to exit, no one mentioned falling prices.
On the contrary, the exit conditions they propose are all related to investment logic. Several institutions have said they will exit Ethereum and Solana if they see real-world adoption growth not leading to higher asset prices in the coming years. An institution that has held crypto assets for ten years said bluntly: "There has to be something that really works. If at some point, these things still don't work, we will leave." Institutions that only hold Bitcoin said that if there is some clear application on Ethereum or Solana and substantially changes the flow of value, they will reconsider their allocation. Sovereign wealth funds have cited a reversal in regulatory direction or a major credibility crisis in the industry as reasons for considering exiting.
Some of these institutions have held positions and weathered multiple market drawdowns of over 50%, including the 2022 drop. They are not surprised by volatility, nor are they deterred by it.
“If the investment logic is correct, and given the S-curve growth in adoption, selling now would be selling too soon,” one investment advisor said.
This means that when crypto markets decline, the main sellers are not institutional investors, but retail investors, holders who are forced to sell, or traders executing short-term strategies, such as closing basis trades or liquidating margin positions. Institutional investors are often on the other side of these deals.
10/Sovereign wealth funds’ crypto allocations are taking shape
Several sovereign wealth funds we spoke to are actively evaluating sizable crypto asset allocations. Several have already completed deployment, while others are still in the early stages of research. Regardless of the stage of progress, we find that their attitude towards cryptoassets is generally positive. However, sovereign wealth funds have been slower to advance allocations than smaller crypto investors.
One sovereign wealth fund explained that even with presidential support and high-level political agreement, the legal and regulatory infrastructure needed to invest sovereign capital in cryptoassets will still take more than a year to build. Other sovereign wealth funds have also publicly mentioned that relevant plans will be advanced in several years.
It’s also worth noting that sovereign wealth funds’ reasons for allocating crypto assets sometimes go beyond the impact of the portfolio itself. Several sovereign investors view crypto investments as a means to attract foreign investment, support national crypto industry plans, or promote their countries as hubs for this high-growth industry. This line of thinking has a practical implication: Even if investment returns are poor, institutions may continue to hold relevant positions as long as there is value in advancing these side goals. Sovereign wealth funds’ crypto allocations may therefore be more sustainable than the market expects.
Looking to the future
Underlying all our interviews is one fundamental question: Will institutional adoption of cryptoassets accelerate, or slow down? Overall, the interview results paint a positive picture. But we are increasingly discovering that whether institutional adoption grows or stagnates will depend on four key factors, two of which can be a boost and two of which can be a hindrance.
The first major positive is regulatory clarity. Several respondents cited the approval of spot crypto ETFs and the pro-crypto industry regulatory stance taken by the current U.S. administration as drivers of their recent expansion of allocations. Further regulatory progress, including the approval of more products, the introduction of legislation to support the crypto industry, and the adoption of crypto-assets at the sovereign level by other countries, will lower operational, reputational and regulatory barriers and drive more investment.
The second positive factor is the increasing participation of peers, which often leads to a flywheel effect: the more trusted institutions disclose allocations, the lower the reputational cost of investing in cryptoassets, and the likelihood that other institutions will disclose allocations increases. Our research shows that this dynamic is already at play, with each new allocator potentially lowering the barriers to entry for multiple institutions. The same forces may work in reverse. As a result, we believe that trends in institutional adoption, whether improving or weakening, are more likely to change exponentially rather than linearly.
As for the downside, the most significant downside risk is a major crisis in the crypto industry, including a technical glitch or the collapse of a key institution in the industry. In the past, severe crises have stalled institutional adoption for years. Incidents like this are likely to reshape organizations' thinking about occupational risks and prevent new allocations for an extended period of time. Increased regulation, as well as substantial advances in hosting, security, and infrastructure, have significantly reduced this risk, but not eliminated it.
The second level of risk is that Ethereum, Solana, and crypto applications fail to prove themselves to be of significant use at scale. For institutions holding these assets, it’s not enough that there are people using crypto applications such as stablecoins, DeFi, tokenization, and prediction markets; if these activities fail to bring value to the underlying tokens, the investment logic cannot be justified. In other words, it's not enough for adoption to grow; prices must keep up. Several institutions have set clear deadlines for this, often several years into the future, and will watch to see whether stablecoin trading volumes, DeFi and tokenization activity, and fees actually accrue to the underlying tokens of Ethereum and Solana, rather than flowing to competitors or other layers in the technology stack. If substantial adoption doesn't occur, or if adoption growth fails to drive the token's value, institutional portfolios may end up holding just Bitcoin.
How different types of institutional investors view cryptoassets today
Throughout the interviews, we were struck by an interesting phenomenon: Institutional investors of all types generally believe that adding crypto assets to their portfolios may be reasonable, but they differ on specific allocation arrangements, including who approves them, who supervises them, and where crypto assets should be placed in their portfolios.
01 / Endowments and Foundations
Assets under management: US$500 million to US$75 billion
Crypto asset allocation: 0.5% to 10% (most 0.5% to 2%; one went to 10% at one point)
Investment vehicles used: Venture capital, spot ETFs, direct custody, hedge funds
Endowments and foundations have been among the first movers in institutional adoption of cryptoassets, with many indicating they have made sizable investments. This is because they generally face lighter governance requirements than other institutions. According to our interviews, in most cases allocation decisions depend primarily on the judgment of the chief investment officer and a small team, rather than a lengthy approval process by a large committee.
The outstanding feature of this group is the fierce competition among institutions. As endowments compare their performance against each other, there may be an element of gaming in their crypto asset allocations: How much crypto assets does a competitor hold? If your allocation ratio is lower or higher than that of your peers, what impact will it have on relative performance? A senior investment professional at a major U.S. endowment put it bluntly: “If your peers hold crypto assets and you don’t, then you are actually structurally short relative to the benchmark against which you are measured.”
Therefore, the allocation behaviors of this group may drive each other: each allocation disclosure may trigger a chain reaction, prompting peers to follow up or benchmark the practices of competitors.
One foundation differs from others in that its crypto holdings sometimes exceed 10% of its portfolio. It cares less about what its peers do and instead views crypto assets as growth and disruptive technology bets. This approach supports larger allocations and is consistent with its mission-driven investment strategy to "actively embrace disruptive technologies that we believe will transform the endowment and ultimately benefit beneficiaries in the long term."
02 / Sovereign Wealth Fund
Assets under management: US$1 billion to US$100 billion
Crypto asset allocation: 1.0% to 1.5%
Investment vehicles used: Hedge funds (directional and market neutral), venture capital, direct custody, spot ETFs and index funds
Sovereign wealth funds are at the other end of the governance spectrum. One sovereign wealth fund we spoke to had its crypto asset allocation come under scrutiny from the country’s central bank leadership. The main questions focus on outside perceptions, such as what the investment will look like if it is made public, and whether other sovereign wealth funds and central banks have already taken the lead.
Outlining its approach, one sovereign wealth fund said they must first convince investment committees and boards, then start small and only expand allocations when external perceptions and the regulatory environment improve. Part of the resistance comes from concerns about the risk itself. Many members with traditional finance backgrounds said the volatility of crypto assets “really puts them off” because even less volatile crypto assets have relatively high annualized volatility. Another sovereign wealth fund recalled that even a simple relative value strategy came under direct scrutiny from the central bank: “Frankly, it was really hard to pitch our first crypto investment.”
At the same time, several sovereign wealth funds noted that their allocation to crypto assets goes beyond the pursuit of returns. Holding crypto assets can also represent a national strategy, sending a signal that the country intends to become a hub for the industry, and integrate with the overall plan to build crypto infrastructure and improve regulation. One sovereign wealth fund described its allocation as a multi-year bet aimed at global recognition rather than chasing short-term returns.
This dual purpose gives sovereign funding its unusual sustainability. Once the allocation is completed, even if the investment return is not ideal, strategic reasons may still support the institution to continue to hold.
03 / Public Pensions
Assets under management: US$1 billion to US$10 billion
Crypto asset allocation: 1.5% to 4.5%
Investment vehicles used: Venture capital and hedge funds
Adoption of cryptoassets by public pensions has been mixed. The main reason is that public pensions face more scrutiny than any other category, not just to their boards of directors but also to the scrutiny of elected officials, beneficiaries, retirees and local media. To put it bluntly, pension funds are reluctant to allocate crypto assets not because crypto assets lack investment value, but because they are under external pressure. A representative of a public pension told us that some people "would rather have a much more mediocre performance as long as we're not in the news". In other words, the only thing worse than losing money is making money on crypto assets.
The pressure from the public reaction was strong enough to prompt some pensions to adjust their practices. One team said they “decided not to grant interviews to the media due to the extremely controversial nature of crypto assets among the public.” The same team said that public scrutiny "did not change their allocation," noting: "The trustees were very determined, they understood the investment logic and maintained their faith; despite all the opposition, they still adhered to the original allocation and investment logic."
Nonetheless, pension funds do hold crypto assets. One pension we spoke to said they incorporate “crypto assets into a wider innovative investment allocation that also includes artificial intelligence, life sciences, space and other innovative technologies”. Most pension funds initially target crypto asset allocations of 1% to 2% of their portfolios, but some institutions have allocated allocations closer to 7% at one point due to strong asset performance. At the time of our interviews, the pension funds interviewed had holdings of 5% or less.
Clearly, concerns about public pressure will influence whether and how pension funds allocate crypto assets. Pensions deciding on allocations prefer to use non-public investment vehicles such as venture capital and hedge funds because these vehicles can be discreetly integrated into existing alternative asset classes, unlike ETF holdings, which may require public disclosure and are less likely to attract attention.
04 / Multi-family offices and investment advisors
Assets under management: US$1 billion to US$50 billion
Crypto Asset Allocation: 0% for non-profits; up to 13% for family offices (target allocation of 5%)
Investment vehicles used: Venture capital, spot ETFs, and index funds
Multifamily offices and investment advisors, some of which also advise nonprofits, can view cryptoassets very differently depending on the type of client. When advising family clients, they tend to be firm on allocations and value crypto assets with the same fundamental and quantitative framework as equities or gold. They are generally much more cautious when advising nonprofits.
This boils down to differences in decision-making levels. Family offices tend to answer to a single principal and may make a decision within a day; nonprofits are often governed by long-standing committees that rely on consensus decision-making, and committee members tend to follow peer benchmarks.
One interviewee summarized the resistance they often encounter on nonprofit investment committees: “They ask, ‘What kind of rat poison is this? Didn’t Warren Buffett say it’s going to go to zero?
This experience holds true throughout our research: Where one person can make a decision, cryptoassets are allocated; where committee consensus is required, decision-making tends to stall. Professional risk and public perception are often not critical factors for family offices, factors that can deter public-facing institutions from moving forward. This is why family offices are often the first to act.
One investment advisor summed up the differences between the two types of institutions: “Our family clients are really ahead of the curve. They take the time to understand crypto assets, don’t need an investment committee, and don’t have the publicity risks that would hold them back.”
05 / Listed companies
Assets under management: Not applicable
Crypto Asset Allocation: 1% to 10% of excess cash
Investment vehicles used: Spot ETFs and direct custody
Listed companies cover a wide range of areas. On one end are digital asset reserve companies (DAT), whose purpose is to raise funds to purchase crypto assets; on the other end are crypto-native companies such as mining companies and exchanges, which hold crypto assets for business needs. In between, more and more regular companies are starting to hold crypto assets as strategic reserves, typically accounting for 1% to 10% of excess cash.
The most noteworthy change for this group: The resistance companies face to holding crypto assets on their balance sheets has dropped significantly in recent years. One company’s CFO told us that in their experience, disclosing crypto holdings in regulatory filings or earnings calls has “become less of a big deal.” The CFO's conclusion illustrates how much the threshold has changed: "This already feels like a very common investment that companies can make."
in conclusion
We opened the report with a question: How do institutional investors view cryptoassets? After dozens of hours talking to these decision-makers, some of the most sophisticated and influential investors in the world, we can conclude that this is no longer the question worth asking. Most of the institutions we interviewed are no longer debating whether crypto assets should enter their investment portfolios, but are instead discussing how much to allocate, in what form, on what timeline, and what governance restrictions need to be adhered to. The discussion has shifted from "should" to "how".
This shift is the real finding of this report and is more important than any single configuration data. Investment beliefs are slow to build and slow to change. Implementing the configuration depends on process, infrastructure and courage, and all three are improving. Restrictions may gradually ease, but investment beliefs will not change in the same way. Most of the remaining obstacles are not concerns about the asset itself, but reputational, operational and timing issues. We expect these barriers to recede over time.
One of our key findings is that institutional adoption has a self-reinforcing effect: each deployment of a trusted institution reduces the cost of the next institution entering the market; one disclosure leads to more disclosures. Therefore, we believe that the future development path is more likely to be exponential rather than linear. Institutions that appear to be lagging behind today are often not skeptics who reject cryptoassets in principle. They are just cautious professionals waiting for more support and data, which are gradually arriving.
Of course, the risks remain real. A severe crypto industry crisis could restart the process, with low long-term returns or real-world adoption, or it could dampen market interest or hinder the due diligence currently underway.
But the future direction of development is not unclear. The institutions we spoke to painted a clear picture: Institutional money is moving into crypto in a planned, long-term manner. Institutional adoption of cryptoassets is earlier than public data suggests and more sustained than the market believes. Following this trend, we expect the majority of institutional investors to hold crypto assets over the next five years.